Bank Lobby Misleads Community Banks Over Stablecoin Rewards
The banking industry has been relying on false claims to restrict stablecoin rewards, according to Faryar Shirzad, Chief Policy Officer of Coinbase.
These claims have been debunked but continue to circulate, causing fear among community banks. The Treasury Department never issued a warning about a $6.6 trillion hit to bank deposits, which was actually just a slide deck published by the Treasury Borrowing Activities Committee.
The myth that stablecoins with rewards will drain deposits from community banks and affect Main Street lending has also been disproven by data from the FDIC showing a 26% increase in community bank deposits over seven years and a recent 5.1% growth in community loans.
The proposed CLARITY Act would restrict rewards, but it's actually just narrowing the terms for paying rewards compared to the GENIUS Act. The banking lobby is pushing for changes that would all but ban rewards, despite knowing their value as seen with credit card rewards paid to consumers.